Global Warming and Globalisation - The North East Passage (NEP) as a Viable Shipping Alternative Between Europe and Asia

Abstract

Abstract Global warming and Globalisation represents both challenges and new opportunities in the 21st Century, and the Arctic is expected to become the new frontier within petroleum and mineral exploration activities and for shipping activities. With an economic and geopolitical shift towards Asia, a significant growth in standard of living coupled with population growth, it is projected that global trade in 2050 will increase by 50% from 2010. The majority of this growth is expected to take place in Asia. Looking specifically at maritime transportation, and projections for growth from 2005 till 2050, estimates point to 93.4% for Europe (including short sea freight); while the corresponding figure outside Europe is 148.2%. Today approximately 90% of global trade is transported on ships, representing a cargo volume of 32.7 billion ton-miles. In commercial terms this represents a value of US$380billion, equal to 5% of world trade. The main objective for this paper is therefore to highlight both possibilities and challenges that will have direct impact on developing the North East Passage (NEP) as a commercially viable shipping alternative compared to the Suez Canal route. Thus, in order to highlight the different issues related to this context, key topics that will be addressed are in this paper are: Globalisation, Arctic petroleum and mineral exploration, Infrastructure, support and Incidents, Ships and logistics, Climate change and environmental issues and International regulation and management of the NEP. 1. Introduction In 2008 global seaborne trade stood at 8.17 billion tons of goods loaded, dry cargo accounting for 66.3% of total volume (hereof; iron ore, coal, bauxite/alumina, phosphate making up 25.7% of total volume), and oil representing 33.7%. The majority of goods loaded were in developing nations which accounted for more than 60% global volumes, and Asia alone taking up 40% of all goods loaded (UNCTAD 2009). Approximately 90% of global trade today is transported on ships, representing a cargo volume of 32.7 billion ton-miles (UNCTAD 2009). Worth noting is that the average growth in merchandised trade from 1998 till 2008 was 12% per annum. Meanwhile the growth respectively for fuels were 18.2% and 20% for natural resources during the same period, with the major growth markets being in Asia (WTO 2010). Further, the largest importers of natural resources in the world in 2008 are: USA 15.2%, Japan 9.1%, China 8.6%, Germany 6%, South Korea 4.7%, France 3.9% and India 3.5%.